Domtar says northern Ontario paper mill to shut down 'indefinitely'

Domtar has announced it is "indefinitely"shutting down its paper mill in Espanola, leading to thelayoff of some 450 workers in the small northern Ontario town.

In a statement Wednesday morning, the company saidthe pulp mill at the decades-old plant will shut down in early October, followed by the idling of the paper machines in November.

"The Espanola mill has been challenged for some time now," Domtar president Steve Henrysaid in a release.

"We have worked diligently to find a viable path forward for the operation including offering it for sale."

Domtar saidthe decision comes after "years of ongoing operating losses and high costs associated with maintaining and operating" the Espanola mill.

The company statement said it will take "appropriate measures" to assist affected workers, and the mill will be idling in a way that is "environmentally sound" and will "facilitate a possible sale or future restart."

"That remains a possibility,"Domtar's regional public affairs manager Bonny Skenesaid in an interview with CBC.

"I don't want to offer false hope. We feel like we've exhausted all avenues and have left no stone unturned in terms of trying to find a viable path forward for the mill."

Jerry Logan, a national union representative with Unifor, saidhe thought a meetingWednesday morningwas to discuss new investment in the Espanola plant, where he represents the majority of workers.

"We didn't see this coming," said Logan, adding that while the plant was up for sale for the past few years,the prospect of shutting down the mill didn't come up in recent contract talks.

"Initial response is kind of heartbroken."

Logan saidworkers were told the Espanola mill could reopen after only a year of idling.

"Our understanding is we will maintain a skeleton crew to keep the electricity running and the equipment ready for a startup," he said.

"And obviously, Unifor's position will be to get this mill restarted as soon as possible."

Espanola Mayor Doug Gervais says he heard that his town's biggest employer was shutting down when he got a call from the provincial government Wednesday morning regarding changes to the forest tenure license for the area, but he says the town was well aware that the mill was having "some struggles"

"It's something we thought could happen," Gervais said.

"Definitely the town will survive. We're a viable community. We will get through this."

But not everyone is as optimistic.

"People need this to survive," said Bernadette Houle, who has lived in Espanola her entire life.

"We have smaller jobs around here, but not like the economy that the mill brings in."

Al Tessierhas worked at Domtarfor the past 30 years, but in the hours after the announcement, he was confident he could find another job if he gets laid off and figured Espanola would also be OK in the long run.

"Think of the glass as half full, not half empty," he said.

"There's jobs for everybody. And I think the mill will open again. It's all good."